Permanently keeping the 1MB (anti-spam) restriction is a great idea ...

[zimmah]

Great post.

Perhaps the best way to deal with the transaction limit, so it does not continue to be a problem, is to quadruple the block limit size at each block reward halving every 4 years.  This should put in in line with Moore's Law, such that running a full node won't be out of reach of the average user.

I like the simplicity of this strategy and it has grounding in practical limitations for physical hardware.

Although I would suggest to have it at the midway points between halvings so as to smooth out any lumpiness in the response to fees/reward when changing the halving and max_block_size increase together. Analogous to presidential and mid-term election cycles.

So quadruple max_block_size at 315k, 525k, 735k, 945k, thereafter every 210k blocks. But need to begin with a one-off quadruple increase to 4 MByte ASAP (to account for previous increase that would have ideally happened at 315k).

Edit: on further thought maybe doubling every 105k blocks is less disruptive again, instead of banging the limit every so often. So a one-off quadruple to 4 MB ASAP then double to 8 MB at next halving (420k blocks) and double every 105k blocks thereafter, i.e. double approx. every 2 years, more or less, depending on hashrate, which is a rough proxy for network demand via price.

yeah, sounds good.

the actual numbers and frequency could be tweaked, but the idea seems good.

This prevents us from having to hardfork it every time.

[amincd]

Great post obviously.

As for what to replace the 1 MB anti-spam restriction with, I think Gavin's proposal is very good:

http://gavintech.blogspot.ca/2015/01/twenty-megabytes-testing-results.html

But then we need a concrete proposal for exactly how to increase the size. Here's what I will propose:

1. Current rules if no consensus as measured by block.nVersion supermajority.
Supermajority defined as: 800 of last 1000 blocks have block.nVersion == 4
Once supermajority attained, block.nVersion < 4 blocks rejected.
2. After consensus reached: replace MAX_BLOCK_SIZE with a size calculated based on starting at 2^24 bytes (~16.7MB) as of 1 Jan 2015 (block 336,861) and doubling every 6*24*365*2 blocks -- about 40% year-on-year growth. Stopping after 10 doublings.
3. The perfect exponential function:
size = 2^24 * 2^((blocknumber-336,861)/(6*24*365*2))
... is approximated using 64-bit-integer math as follows:

Code:

double_epoch = 6*24*365*2 = 105120
(doublings, remainder) = divmod(blocknumber-336861, double_epoch)
if doublings >= 10 : (doublings, remainder) = (10, 0)
interpolate = floor ((2^24 << doublings) * remainder / double_epoch)
max_block_size = (2^24 << doublings) + interpolate

This is a piecewise linear interpolation between doublings, with maximum allowed size increasing a little bit every block.

Instead of sudden and massive block size limit increases every two or four years, it would increase a little every block.

[Lauda]

Excellent post. This was very clear and the best 'pro' argument for the fork. It pretty much squashed any of those ridiculous (no, we have not had a real 'anti-fork arguments) in the other thread.
It's nice to see that we still have a few very intelligent individuals.

[homo homini lupus]

my point is: the chain is already pretty big. If it becomes 20 fold as big i will be forced to stop using bitcoin because i don't want a lite-client or rely on 3rd parties with my coins but on the other hand can't afford upgrading harddrive all the time (especially not with these bad btc prices).

If you raise blocklimit 20-fold it will become unaffordable for normal people to store the blockchain on their computers and because of that people loose access.


On a sidenote:
I am not the only one totally annoyed by how bitcoin behaves in an effort to keep the dominant position and be the 'one coin for all' and with this hurts the alt-industry. I think at this point it becomes inevitable to start using more than one chain and stop looking at btc as the only coin worth bothering with.
All the problems dissolve at exactly the moment we accept a multi-coin/chain solution.

according to OP, if i understand right: if we don't raise limit little people loose access (i doubt it)
BUT raising the blocklimit will also ensure little people to loose access.
Conclusion: one blockchain for everyone is no viable idea

With raising the blocklimit and creating a chain as big as 200gb and more as soon as 1 or 2 years down the road bitcoin won't be able to reach the enduser.

[RoadStress]

my point is: the chain is already pretty big. If it becomes 20 fold as big i will be forced to stop using bitcoin because i don't want a lite-client or rely on 3rd parties with my coins but on the other hand can't afford upgrading harddrive all the time (especially not with these bad btc prices).

If you raise blocklimit 20-fold it will become unaffordable for normal people to store the blockchain on their computers and because of that people loose access.

Why does everyone believe that raising the block limit will instantly raise the blockchain too? It will not. It will take time until that will happen!

[solex]

D&T, a very informative OP.

Empirically, ~1MB blocks support 2.7 tps.

https://bitcointalk.org/index.php?topic=941331.msg10360199#msg10360199

[Melbustus]

<great post>

Agreed, and thanks for the taking the time to thoroughly explain and hopefully set some people straight on this.

[...but dang, I was scared for a second after reading the post title but before the post content had loaded ]

[LiteCoinGuy]

"Conclusion

The blockchain permanently restricted to 1MB is great if you are a major bank looking to co-opt the network for a next generation limited trust settlement network between major banks, financial service providers, and payment processors.   It is a horrible idea if you even want to keep open the possibility that individuals will be able to participate in that network without using a trusted third party as an intermediary."


great post.

[homo homini lupus]

my point is: the chain is already pretty big. If it becomes 20 fold as big i will be forced to stop using bitcoin because i don't want a lite-client or rely on 3rd parties with my coins but on the other hand can't afford upgrading harddrive all the time (especially not with these bad btc prices).

If you raise blocklimit 20-fold it will become unaffordable for normal people to store the blockchain on their computers and because of that people loose access.

Why does everyone believe that raising the block limit will instantly raise the blockchain too? It will not. It will take time until that will happen!

yes, my answer is on the other thread. No idea why OP needs to open third thread on the same issue and can't just post his view on the other thread. Probably he feels important enough to open a new thread (he must be extraordinary important) . Maybe i open another one for the same topic with my personal views ... maybe just everyone should open their personal thread for this.

[amincd]

^ I would say this guy doesn't want Bitcoin to succeed

Bitcoin has no advantage over low inflation altcoins which can hold their value. Bitcoin ends right here. Crypto is just about to begin.
Sorry for all who fell for the hype around that particular coin called 'Bitcoin'.

Anyway, it deserves to be said again: great post by D&T. This is basically the definitive counter to arguments from supporters of a permanent 1 MB restriction.

[homo homini lupus]

^^^

i would say this guy is a sheep

[zimmah]

my point is: the chain is already pretty big. If it becomes 20 fold as big i will be forced to stop using bitcoin because i don't want a lite-client or rely on 3rd parties with my coins but on the other hand can't afford upgrading harddrive all the time (especially not with these bad btc prices).

If you raise blocklimit 20-fold it will become unaffordable for normal people to store the blockchain on their computers and because of that people loose access.

It's spelled lose.

and you rather wait for 30 years before your transaction gets through? Because that's what will happen when you keep the filesize at 1 MB

On a sidenote:
I am not the only one totally annoyed by how bitcoin behaves in an effort to keep the dominant position and be the 'one coin for all' and with this hurts the alt-industry. I think at this point it becomes inevitable to start using more than one chain and stop looking at btc as the only coin worth bothering with.
All the problems dissolve at exactly the moment we accept a multi-coin/chain solution.

Allowing altcoins is opening a can of shit, if we just keep inventing and embracing new altcoins all the time, everyone would just print their own coin and how exactly would that be different from every nation issuing their own fiat currency?

Bitcoin is valuable because it's limited, deal with it. No other coins need to replace bitcoin, and if bitcoin is not suitable, we update it. And that's exactly what will happen, bitcoin will get an update, and it will be updated again and again until it is perfected. Just like every other piece of technology, including the internet.

Technology adapts, technology evolves, technology changes, get used to it. The only constant in the universe is change, you either change with it and adapt, or you get left behind.

according to OP, if i understand right: if we don't raise limit little people loose access (i doubt it)
BUT raising the blocklimit will also ensure little people to loose access.
Conclusion: one blockchain for everyone is no viable idea

With raising the blocklimit and creating a chain as big as 200gb and more as soon as 1 or 2 years down the road bitcoin won't be able to reach the enduser.

little people will lose access to the blockchain if we KEEP the limit at 1 MB because the 4 tps or something will never be enough to cover even a fraction of the transactions. You'd need insane amounts of fees to get included in the blockchain, more than any individual could ever afford.

We are currently siting at an average size of about 0.4 MB (so we are not at our limit yet) and it's not being spammed to be full, which is good. But there's not a lot of room left for growth.

40% may not seem like much, but under exponential growth, it's getting dangerously close. And with things like this you really don't want to wait til the last moment.

Also, it's just the LIMIT that increases, it doesn't suddenly increase the ACTUAL size 20 fold, it just increases the MAXIMUM POSSIBLE size 20 fold. So it gives us a little more breathing room, nothing to be scared of.

and lastly, harddisks are very cheap nowadays, and will only become cheaper.

what does it matter if the blockchain is 30 gb or 500 gb? It's not like 2TB harddisks are expensive or anything. Still cheaper than a safe.

Or do you really trust the banks with all your money? See if they don't run off in the event of the next economic collapse? Think the government will bail them out again? With what money? They can't really raise the taxes any higher you know? Not without civil unrest anyway.


I bet you're one of those guys that keep complaining about phone batteries getting smaller, while in reality they get bigger (capacity-wise anyway), but it's all those extra functions that drain the batteries faster than they can create more powerful batteries.

my point is: the chain is already pretty big. If it becomes 20 fold as big i will be forced to stop using bitcoin because i don't want a lite-client or rely on 3rd parties with my coins but on the other hand can't afford upgrading harddrive all the time (especially not with these bad btc prices).

If you raise blocklimit 20-fold it will become unaffordable for normal people to store the blockchain on their computers and because of that people loose access.

Why does everyone believe that raising the block limit will instantly raise the blockchain too? It will not. It will take time until that will happen!

yes, my answer is on the other thread. No idea why OP needs to open third thread on the same issue and can't just post his view on the other thread. Probably he feels important enough to open a new thread (he must be extraordinary important) . Maybe i open another one for the same topic with my personal views ... maybe just everyone should open their personal thread for this.

You had time to post this, but you couldn't just quote yourself here?

I bet you're afraid that we will come up with counter-arguments to it, because you probably realize you are wrong but you're not man enough to admit it.

[grau]

The OP gives a valid technical argument for raising block size limit, but is neglecting a financial argument against it.

The miners' income has to be greater than the cost of their work. Miners' income is inflation now, but is expected to be replaced by fees,
since inflation halves every four years. Purchasing power of new coins might be sustained for a while but must converge to zero in the limit.

Transaction fees exist only because there is a competition for block space. Eliminating that competition eliminates the fees and with that mining.

Therefore block space has to become and remain a scarce asset.

[zimmah]

the point is: the chain is already pretty big. If it becomes 20 fold as big i will be forced to stop using bitcoin because i don't want a lite-client or rely on 3rd parties with my coins but on the other hand can't afford upgrading harddrive all the time (especially not with these bad btc prices).

If you raise blocklimit 20-fold it will become unaffordable for normal people to store the blockchain on their computers and because of that people loose access.

No need to post the same thing in 2 separate threads. Here is my answer:

my point is: the chain is already pretty big. If it becomes 20 fold as big i will be forced to stop using bitcoin because i don't want a lite-client or rely on 3rd parties with my coins but on the other hand can't afford upgrading harddrive all the time (especially not with these bad btc prices).

If you raise blocklimit 20-fold it will become unaffordable for normal people to store the blockchain on their computers and because of that people loose access.

Why does everyone believe that raising the block limit will instantly raise the blockchain too? It will not. It will take time until that will happen!

Even if it takes time: the blockchain is already very big - if you make it bigger normal people will need to upgrade their hardware to use it and people won't do that.


Right now there isn't even an immediate need to fork so the proposale doesn't make sense at this point in time.

As noted before: reaching the blocklimit will at first result in microtransactions being pushed off the chain and that won't be an issue for most users.

Fork to a bigger chain isn't rational at this point in time. Period.

Do you know how many viable blockchains are out there with almost only empty blocks and very small chanis (below 1bg storage)? Dozens!

Blockchains aren't scarce. So why would i use one blockchain that requires hundreds of GB storage when i can use one almost as secure  with much less HD-use? I personally will leave btc behind for good with a larger chain (just refuse using Gavincoin - it isn't even 'bitcoin' - it is really 'gavincoin') or stick to the old fork in case it can survive.

I guess you were referring to this one.

even though we never reached over 50% of the maximum blocksize yet, the block sizes vary wildly per block, and grow pretty much exponentially.

Also, we are at about 30% consistently right now.

If it keeps growing at the same rate as it has now, it may very well take a little over a year before we really need the upgrade, but what if it doesn't? What if we get another rally next month, or in two months? Another rally will surely come with an increase in transactions, a massive increase, as can be seen from the charts. And since we are already using about 30% another rally will likely need more than 1MB.

It will not need 20MB, but while we are at it we may as well give ourselves some room.

If we keep the 1MB limit, the next rally will kill bitcoin, because the transactions will be too limited, the network will clog, and people will blame the blockchain technology for it.

And we may very well never get a second chance to do it right.

and all those other blockchains are so small because NO ONE USES THEM

growth is a GOOD thing, more size means more transactions means more users means more value.

[Foxpup]

can't afford upgrading harddrive all the time ... raising the blocklimit and creating a chain as big as 200gb and more

200GB of hard disk space costs about $10, making it the cheapest upgrade you can possibly get. Though if your system is so cheap that 200GB of hard disk space actually counts as an upgrade, one has to wonder how you ever managed to run a full node on it in the first place.

[johnyj]

You must be able to broadcast that huge block to most of the nodes in 10 minutes. I don't see the latest research regarding this area, but there is a paper from 2013


http://www.tik.ee.ethz.ch/file/49318d3f56c1d525aabf7fda78b23fc0/P2P2013_041.pdf

Based on this research, it took 0.25 seconds for each KB transaction to reach 90% of network. In another word, a 1MB block will take 256 seconds to broadcast to majority of nodes and that is 4 minutes

When block size reach 10MB, you will have a broadcast time of 40 minutes, means before your block reach the far end of the network, those nodes have already digged out 3 extra blocks thus your block is always orphaned by them. And the whole network will have disagreement about which segment have the longest chain, thus fork into different chains

Gavin's proposal is to let mining pools and farms connect to high speed nodes on internet backbone. That is reasonable, since the propagation time is only meaningful for miners, your transaction will be picked up by the mining nodes closest to you and if those mining nodes have enough bandwidth, they can keep up with the speed. But anyway, how much bandwidth is really needed to broadcast 10MB message in a couple of minutes between hundreds of high speed nodes need to be tested. And this is the risk that someone worried about the centralization of mining nodes: Only those who have ultra high speed internet connection can act as nodes (I'm afraid that chinese farms will be dropped out since their connection to the outside world is extremely slow, they will just fork to their own chain inside mainland china)

[zimmah]

The OP gives a valid technical argument for raising block size limit, but is neglecting a financial argument against it.

The miners' income has to be greater than the cost of their work. Miners' income is inflation now, but is expected to be replaced by fees,
since inflation halves every four years. Purchasing power of new coins might be sustained for a while but must converge to zero in the limit.

Transaction fees exist only because there is a competition for block space. Eliminating that competition eliminates the fees and with that mining.

Therefore block space has to become and remain a scarce asset.

like i have said before in this very thread, it's better to sell 1 billion screws and make 0,01 cent profit from every screw than to sell 1 Lamborghini and make a profit of $100000 from that single sale.

bigger blocks means more transactions which means MORE FEES.

not less fees, MORE fees.

it's a GOOD thing for miners, not a bad thing.

Imagine if you owned a taxi business, but no matter how many taxis and taxi drivers you have, you are only allowed to transfer 500 passengers a day, period. You could own a million cars and a million drivers, but you would still only be allowed 500 passengers. There could be a major sport events like the superbowl or the champions league, 100,000 of people could be waiting for a taxi ready to pay but no, you can not take more than 500, why? because protocol said so.

The blockchain works by supply and demand, and supply is made by the miners themselves, not by some dumb hardcoded limit.

If the miners think 0.001 fee per transaction is too low, they are free to deny those transactions. But they should deny transactions just because 'lol the block is full'

[grau]

The blockchain works by supply and demand, and supply is made by the miners themselves, not by some dumb hardcoded limit.

You assume that miner can effectively control supply. This in absence of a block size limit is only the case if they are building cartels, that artificially limit the supply.

Is that you really prefer instead of an algorithmic decision?
Remember Bitcoin's promise is to operate without the need of cartels and authorities.

[amincd]

^ Did you read the entire post? The OP fully addressed the effect on fees:

On a transaction fee basis.
Currently the cost of the network is roughly $300 million annually. The users of the network are collectively purchasing $300 mil worth of security each year.  If users paid $400 million the network would be more secure and if they paid $200 million it would be less secure. Today the majority of this cost is paid indirectly (or subsidized) through the creation of new coins but it is important to keep in mind the total unsubsidized security cost.  At 2 tps the network the unsubsidized cost per transaction would be about $5. At 100 tps it would be $0.05.  If Bitcoin was widely adopted, more users purchasing more coins should mean a higher exchange rate and thus the value of potential attacks also rises.  The future cost of the network will need to rise to ensure that attacks are not economical and non-economic attacks are prohibitively expense relative to the benefit for the attacker.   It may not rise linearly but it will need to rise.   If someday one Bitcoin is worth $10,000 and we are still only spending $300 million a year on security we probably are going to have a problem.  Now advocates of keeping the limit may argue that the majority of the network cost won't be paid by fees for many years but the reality is that with the limit on potential transactions there are only two other ways to balance the equation and that is much higher fees or much lower security.

[ABitNut]

The OP gives a valid technical argument for raising block size limit, but is neglecting a financial argument against it.

The miners' income has to be greater than the cost of their work. Miners' income is inflation now, but is expected to be replaced by fees,
since inflation halves every four years. Purchasing power of new coins might be sustained for a while but must converge to zero in the limit.

Transaction fees exist only because there is a competition for block space. Eliminating that competition eliminates the fees and with that mining.

Therefore block space has to become and remain a scarce asset.

like i have said before in this very thread, it's better to sell 1 billion screws and make 0,01 cent profit from every screw than to sell 1 Lamborghini and make a profit of $100000 from that single sale.

bigger blocks means more transactions which means MORE FEES.

not less fees, MORE fees.

it's a GOOD thing for miners, not a bad thing.

Imagine if you owned a taxi business, but no matter how many taxis and taxi drivers you have, you are only allowed to transfer 500 passengers a day, period. You could own a million cars and a million drivers, but you would still only be allowed 500 passengers. There could be a major sport events like the superbowl or the champions league, 100,000 of people could be waiting for a taxi ready to pay but no, you can not take more than 500, why? because protocol said so.

The blockchain works by supply and demand, and supply is made by the miners themselves, not by some dumb hardcoded limit.

If the miners think 0.001 fee per transaction is too low, they are free to deny those transactions. But they should deny transactions just because 'lol the block is full'

To clarify... Suppose there are 5 transactions:

#	Fee	Size	Fee per 256 KB
1	0.1	512KB	0.05
2	0.1	512KB	0.05
3	0.05	256KB	0.05
4	0.05	256KB	0.05
5	0.01	256KB	0.01

Now with the 1 MB limit the miner can, at most, earn BTC0.2.
With a 20MB limit the miner can earn BTC0.31. More than 1.5x as much as with the 1MB limit! Did their cost increase 1.5x? I don't see that. I wonder which fork miners would pick...